Cyprus bailinThroughout the colorful history of organized crime in the United States, periodic eruptions of inter-gang Mafia violence have dotted the criminal landscape. When turf wars broke out between competing crime families in major cities such as New York and Chicago, the combatants would conduct their warfare from unsavory redoubts such as abandoned warehouses or low-rent hotels and apartments. In such locations, the soldiers would spend their off hours sleeping on rented mattresses until the internecine conflicts had run their course; hence the expression “going to the mattresses.”

Well, there is another turf war going on, a worldwide one, one that threatens the entire economic and political landscape of the planet. It is between all the hard working savers on the planet and the ever greedy criminal bankers and their cohorts in government. The real big canary singing out an extreme danger warning to all traditional savers who wish to entrust their wealth to banks and other paper vehicles – stocks, bonds, etc., is the incredible emergency banking shutdown in the tiny island nation of Cyprus.


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Submitted by Deviant Investor:

. Granted, Cyprus represents only .02% of the population of the European Union. Yet what is occurring there is the harbinger of great risk to traditional savers on every continent; and equally important, there are many more scary danger signs raising their ugly heads as well.

To recap for a moment, let’s briefly itemize the situation in Cyprus. Cyprus, like just about every other country on the planet, has for decades been politically committed to a socialist based economy. In this scenario, politicians have promised benefits to the various voting classes which have far exceeded their annual tax revenue. This has caused its government to continually accumulate deficits that have resulted in a very large national debt in relation to its GDP. This debt has been collateralized by sovereign bonds sold to and purchased by large banks in Europe and elsewhere. Now this debt has become so large the government of Cyprus can no longer afford to pay even the interest, let alone reduce principal. What happens at this juncture, is that a powerful international banking institution, in this case, the European Central Bank (substitute your favorite lender of last resort – the Federal Reserve, the IMF, the World Bank, etc., etc.), has agreed to come to the rescue of the cash strapped government and help it make its current annual debt payment.

However, this emergency funding comes with a draconian penalty for the trusting taxpaying savers. In this instance, the European Central Bank has cut a secret deal with the Cypriot government to raid the bank accounts of all the country’s bank depositors, between six and ten percent (the latest plan is to confiscate about 40% of uninsured deposits). This proposed robbery, if it comes to pass, will confiscate billions from citizens and non-citizens alike who have placed their trust in the security of Cyprus’s banks. What has resulted, of course, is riotous response throughout the nation and frantic sell-offs in world equity markets.

What is important to understand here, though, is that this same game plan has been occurring for several years now in many countries throughout the world. Here is the short list of some of the transgressions that unscrupulous governments, under pressure from their major bank lenders, have perpetrated, and continue to perpetrate upon unsuspecting savers.

October 2008 – Argentina’s leftist government, facing a gigantic revenue shortfall, proposes to nationalize all private pensions so as to meet national debt payments and avoid its second default in the decade.

November 2010 – Headline – Hungary Gives Its Citizens an Ultimatum: Move Your Private Pension Fund Assets to the State or Permanently Lose Your Pension – This is an effective nationalization of all pensions.

November 2010 – Ireland elects to appropriate ten billion euros from its National Pension Reserve Fund to help fund an eighty-five billion euro rescue package for its besieged banks. Ireland also moves to consider a regulatory move that compels some private Irish pension funds to hold more Irish government debt, thereby providing the state with a captive investor base but hugely raising the risk for savers.

December 2010 – France agrees to transfer twenty billion euros worth of assets belonging to its Fonds de Reserve pour les Retraites (FRR), the funded portion of its retirement system, to help pay off recurring social benefits costs. No pensioners are consulted.

April 2012 – Argentina announces that its Economy Ministry has taken an emergency loan from the national pension fund in the amount of $4.3 billion. No pensioners were consulted.

June 2012 – Treasury Secretary Timothy Geithner unilaterally appropriates $45 billion from US federal pension funds to help tide over US deficits for the remainder of fiscal year 2011.

January 2013 – Treasury Secretary Geithner again announces that the government has begun borrowing from the federal employees pension fund to keep operating without passing the approaching “fiscal cliff” debt limit. The move effectively creates $156 billion in borrowing authority from federal pension funds.

March 2013 – Open Bank Resolution finance minister, Bill English, is proposing a Cyprus style solution for potential New Zealand bank failures. The reserve bank is in the final stages of establishing a rescue scheme which will put all bank depositors on the hook for bailing out their banks. Depositors will overnight have their savings shaved by the amount needed to keep distressed banks afloat.

Ladies and gentlemen, this trend is JUST getting underway. Bank failures, sovereign bond collapses, and national government bankruptcy are just around the corner. Because of the interconnectedness of world debt markets and derivatives risk, counted in hundreds of trillions of dollars, the risk to traditional investment vehicles looms ever closer. We’re at critical eleventh hour crossroads where savvy investors need to head for “the mattresses” to protect their life savings. We may be biased but we strongly feel that the very surest and safest “mattress plan” in this extremely dangerous financial environment, is to invest in the one vehicle that has survived every crisis in recorded history, precious metals. When all else fails, gold and silver will be there to save you.



  1. As private and business borrowing has been trailing off over the past few decades, this absence has put onus on governments to temporarily ‘span the gap’ anticipating an iminent resumption of economic activity, where governments’ ‘saving grace’ would have redeemed its Bond Holders from ruin. Well, that’s the Keynesian theory, at least.
    In fact, rather stubbornly keeping to the Classical Economic Laws, instead, the situation has only grown into an immensely ponderous, ever-growing Maw that’s now no longer capable of supporting its own weight, teetering ominously on the brink of crashing onto all the world’s currency holders indiscriminately.
    The certainty of this day’s occurrance was starkly presaged in 1929 and irrevokably confirmed throughout the 1930s. The mortal lesson ought to have been apprehended then, but avarice and bull-headed will has a way of blinding people to facts slapping their faces rosy red.
    Paper Rots, Coin Does Not.

  2. Just some anecdotal evidence of the coming shortage in Physical, here is aomething that I posted on another good blog:
    As the spot price of silver drops, the availability of Peace & Morgan Silver Dollars appears to be drying up.

    The two local places where I have been purchasing these from – they just can not keep them in-stock these days.

    In an email exchange with The Doc a few months back, he told me the available supply of ‘Junk Silver’ is shrinking.

    This bodes well for those folks who have been prudent enough to accumulate the old coins…

  3. Well I don’t have to care about putting anything Under the Mattress or losing much in the bank as I only keep enough to pay bills. The rest, well I’m not going to tell you where I put it; I think You Can Guess. Keep Stacking

  4. Owing somebody else or an institution money or not having any money are two fates that are worse than having to find some way to protect a pile of it.  If you  have money to hide in a mattress then do yourself a favor and spend some dough on a home safe.  An ounce of Gold or less will get you a decent home safe that you can anchor in concrete.  

    • Unfortunately anyone comming to get your wealth wether they be a burglar or some govt thieving tosser will be looking for a safe or suchlike, better to split your eggs up and hide em in different locations.
      I have a ltlle red lockbox which feels rather heavy, but any would be thief will be dissapointed upon getting it open cause there’s bugger all inside it other than fiat tuppences and pennies lol
      Besides it’s cheaper to buy a shovel :)

  5. LOL, Sec. Giethner appropiates hither and yon, going where no mortal banker has gone before! Them unionised gov. workers with unbelievible golden parachutes, who rally to his immortal flag. OOPS, the look on their faces when the finally see what he did to them! Almost like the look on the face of a recovering libral when they see what they did to themselves and all around them. They can’t plead stupidity, their human. They can’t plead ingorance, half of those they know complained that they were thieves. All they can do is plead is apethy. Which only means they didn’t give damn until it was them. Bet they decide to go along with 100% confiscation of their neighbors wealth. I mean whatever is left over from stealing 90% of what their neighbor already earned and has left over despite them.

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